Calculate Average Payment Period. Option 1: 123 days Option 2: 121 days Option 3: 132 days Option 4: 133 days

Answer: 123 days. Solution: Given: Creditors = 90,000 Bills Payable = 52,000 Purchases = 4,20,000 Concept: Average Payment Period = (Average Payables ÷ Credit Purchases) × 365 Assuming all purchases are on credit: Average Payables = Creditors + Bills Payable Average Payables = 90,000 + 52,000 = 1,42,000 Calculation: Average Payment Period = (1,42,000 ÷ 4,20,000) × 365 Average Payment Period = 0.3381 × 365 Average Payment Period ≈ 123 days Final Answer: 123 days (Option 1)

Financial Statements

Ratios

Easy

Particulars	₹
Revenue from Operations	8,75,000
Creditors	90,000
Bills Receivable	48,000
Bills Payable	52,000
Purchases	4,20,000
Trade Debtors	59,000

Calculate Average Payment Period.

123 days

121 days

132 days

133 days

✅ Correct Option: 1

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List-I	List-II
(A) Liquidity Ratio	(I) Inventory Turnover ratio
(B) Solvency Ratio	(II) Quick Ratio
(C) Activity (or Turnover) Ratio	(III) Price earning ratio
(D) Profitability Ratio	(IV) Total asset to debt ratio

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Calculate Average Payment Period.

Solution

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